19th Mar 2026 08:56
(Alliance News) - Stock prices in London opened sharply lower on Thursday, as investors digested UK labour market data and braced for interest rate decisions from the Bank of England and the European Central Bank later in the day.
The FTSE 100 index opened down 117.95 points, 1.2%, at 10,186.60. The FTSE 250 was down 235.74 points, 1.1%, at 21,845.43, and the AIM all-share was down 13.92 points, 1.9%, at 739.29.
The Cboe UK 100 was down 1.2% at 1,011.95, the Cboe UK 250 was down 1.1% at 19,048.86, and the Cboe small companies was marginally lower at 17,464.83.
UK jobs data showed wage growth slowing and unemployment steady at 5.2%, though the figures are likely to be overshadowed by another surge in energy prices amid the escalating conflict in the Middle East and as markets look ahead to the BoE decision.
Brent oil traded at USD113.01 a barrel early Thursday, up from USD108.21 late Wednesday, after Iran said it had inflicted "extensive damage" on the site of the world's largest liquefied natural gas facility in Qatar.
Tehran said it fired a ballistic missile at Ras Laffan, a sprawling industrial complex housing QatarEnergy's LNG plants and a refinery, in retaliation for an attack on Iran's South Pars gasfield. Qatar's defence ministry said five missiles were launched, with four intercepted and one striking the complex. QatarEnergy said the strike caused "extensive damage".
The development marks a sharp escalation in the Middle East conflict and raises risks for global energy markets. Qatar is the world's second-largest LNG exporter and the biggest supplier to Asia.
US President Donald Trump warned Iran against further retaliation, saying the US would "massively blow up" a major Iranian gas field if Qatar is attacked again. Trump also said Washington "knew nothing" about Israel's strike on South Pars.
South Pars is part of the world's largest natural gas field, shared by Iran and Qatar. Iran has since launched strikes against several Gulf nations, including Qatar, Saudi Arabia and the UAE.
In European equities on Thursday, the CAC 40 in Paris was down 1.5%, while the DAX 40 in Frankfurt was down 1.1%.
The pound was quoted at USD1.3267 early Thursday, lower than USD1.3334 at the London equities close on Wednesday. Against the euro, sterling rose to EUR1.1583 from EUR1.1577. The euro stood at USD1.1454, down from USD1.1517. Against the yen, the dollar was trading at JPY159.11, down from JPY159.45.
According to the Office for National Statistics, the UK unemployment rate was unchanged at 5.2% in the three months to January, matching the previous period and slightly below consensus of 5.3%.
The employment rate rose by 0.2 percentage point to 75.1%, with employment increasing by 84,000 over the period, ahead of expectations for a 52,000 rise. The economic inactivity rate fell by 0.3 percentage point to 20.7%.
Wage growth cooled. Regular pay, excluding bonuses, rose 3.8% year-on-year, slowing from 4.1% and below expectations of 4.0%. Including bonuses, average earnings increased 3.9%, in line with forecasts but down from 4.2%.
The claimant count rose by 24,700 in February, below expectations for a 25,800 increase but sharply higher than January's 4,700 rise. The claimant count rate edged up to 4.4% from 4.3%.
In Asia on Thursday, the Nikkei 225 index in Tokyo closed down 3.4%. In China, the Shanghai Composite ended down 1.4%, while the Hang Seng index in Hong Kong fell 2.0%. The S&P/ASX 200 in Sydney closed down 1.7%.
Thursday's BoE decision follows the US Federal Reserve's announcement late Wednesday, when Chair Jerome Powell signalled that the US central bank is unlikely to cut interest rates again until inflation shows clearer signs of cooling.
Powell said it remains too early to assess the economic impact of the recent surge in oil prices, even as markets have begun pricing in higher inflation expectations. He stressed that price pressures were already proving more persistent than hoped prior to the outbreak of war, particularly in goods categories most affected by tariffs.
While the Fed lifted its inflation projections, Powell largely attributed this to the lingering effects of tariffs rather than solely to disruption in the Middle East.
In the US on Wednesday, Wall Street ended sharply lower, with the Dow Jones Industrial Average down 1.6%, the S&P 500 down 1.4% and the Nasdaq Composite down 1.5%.
The yield on the US 10-year Treasury was quoted at 4.28%, widening from 4.22%. The yield on the US 30-year Treasury was quoted at 4.89%, widening from 4.86%.
Back in London, oil major BP rose 1.3% to top the FTSE 100, supported by higher crude prices and after agreeing to sell its Gelsenkirchen refinery in Germany to Klesch Group as part of its broader restructuring.
BP also raised its structural cost-cutting target to between USD6.5 billion and USD7.5 billion by 2027. It is the second time the company has increased its savings target since February last year, as it reshapes its portfolio to refocus on its core oil and gas business.
Only a handful of blue-chip stocks traded in positive territory, including Prudential, up 0.5%, after Deutsche Bank Research raised its price target to 1,440 pence from 1,355 pence and reiterated a 'buy' rating.
Unilever fell 1.0% after the Financial Times reported that it and Kraft Heinz held talks in recent months over a potential merger of parts of their food businesses, though discussions have ended without a deal.
The talks centred on combining Unilever's food division with Kraft Heinz's condiments business, potentially creating a company worth tens of billions of dollars.
The report follows a Bloomberg article saying Unilever is in the early stages of considering a separation of its food assets, as it seeks growth from beauty, personal care and wellbeing brands. Last year, Unilever spun off its ice cream arm into Magnum Ice Cream, retaining a near-20% stake it plans to reduce over time. Kraft Heinz has also reviewed its portfolio and previously announced plans to split into two entities, though that transaction is currently on hold.
On the FTSE 250, Atalaya Mining was at the bottom, down 7.8% following its annual results.
IG Group topped the mid-cap index, up 7.3%, after saying current 2026 trading is in line with expectations and forecasting 2026 Ebitda in line with consensus of GBP538.1 million. IG recommended a 28.12 pence final dividend and total dividend for the seven months to December 31. For 2025, pretax profit rose 15% to GBP563.7 million from GBP490.2 million, while revenue increased 7% to GBP1.12 billion from GBP1.05 billion.
Insurance and reinsurance market Lloyd's of London reported higher annual profit and premium growth in 2025, supported by strong investment returns, and unveiled a new five-year strategy focused on underwriting discipline and efficiency.
Pretax profit rose to GBP10.6 billion from GBP9.6 billion, as gross written premium increased to GBP57.9 billion from GBP55.5 billion. Investment returns climbed to GBP6.0 billion from GBP4.9 billion, offsetting a slight decline in underwriting profit to GBP5.2 billion from GBP5.3 billion. The combined ratio worsened to 87.6% from 86.9%, while the underlying ratio deteriorated to 81.8% from 79.1%, although catastrophe losses were described as relatively modest.
Chief Executive Patrick Tiernan said the results provide a strong foundation for the challenges ahead, noting the market's capital strength amid ongoing uncertainty.
Gold was quoted at USD4,734.58 an ounce early Thursday, lower than USD4,875.60 on Wednesday.
Still to come on Thursday's economic calendar are eurozone construction output, Ireland's trade balance, the UK interest rate decision, US weekly jobless claims, the ECB interest rate decision, and US new home sales and wholesale inventories.
By Eva Castanedo, Alliance News reporter
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